The yeast Sed5 protein, which is required for vesicular transport between ER and Golgi complex, is a membrane protein of the syntaxin family. These proteins are thought to provide the specific targets that are recognized by transport vesicles. We have investigated the mechanism by which Sed5 protein is itself localized. Expression of epitope-tagged versions of the yeast, Drosophila and rat Sed5 homologues in COS cells results in a perinuclear distribution; immuno-EM reveals that the majority of the protein is in a tubulo-vesicular compartment on the cis side of the Golgi apparatus. A similar distribution was obtained with a chimeric molecule consisting of a plasma membrane syntaxin with the Drosophila Sed5 transmembrane domain. This indicates that the membrane-spanning domain contains targeting information, as is the case with resident Golgi enzymes. However, alterations to the transmembrane domain of Drosophila Sed5 itself did not result in its mistargeting, implying that an additional targeting mechanism exists which involves only the cytoplasmic part of the protein. This was confirmed by modifying the transmembrane domain of the yeast Sed5 protein: substitution with the corresponding region from the Sso1 protein (a plasma membrane syntaxin homologue) did not affect yeast Sed5 function in vivo.